I’m sorry if my post was confusing. In order for a tax deduction to occur, the mortgage must exist. If the home is paid for, therefore no mortgage interest to deduct, the home owner can still donate money to charity, instead of interest to a bank. That will give them a new deduction.
Why pay $10K to a bank to avoid paying $3K to the government?
There are times like now where cash is king. I hate and usually avoid cliches such as this, but this cliche couldn’t be more appropiate. One reason banks are reluctant to make mortages at the present time is to conserve their cash. Corporations are doing likewise in order to protect their viability.